EXHIBIT 99.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of June 7, 2002, is by and
among Blue River Bancshares, Inc., an Indiana corporation ("Blue River"), and
Xxxxxxx Xxxxxxx, III, Xxxxx X. Xxxxxx and L. Xxxx Xxxxxx (collectively, the
"Purchasers").
RECITALS
A. Blue River has authorized the issuance and sale of 321,089 shares of
its common stock without par value (the "First Shares") to the Purchasers at a
price of $4.73 per share.
B. Blue River has authorized the issuance and sale of 535,148 shares of
its common stock, without par value (the "Second Shares"), to fewer than 30
individuals of high net worth to be identified by the Purchasers which may
include one or more of the Purchasers (the "Second Purchasers") at a price of
$4.73 per share.
C. The Purchasers are willing to acquire the First Shares for an
aggregate payment of $1,518,750.97 in the respective amounts set forth on
Exhibit A hereto.
D. The Purchasers are willing to identify the Second Purchasers who
shall purchase the Second Shares for an aggregate payment of $2,531,250.04.
E. The parties desire to and hereby reduce to writing their agreement
with respect to the foregoing.
THEREFORE, in consideration of the mutual covenants contained herein
and the acts to be performed hereunder, the parties hereby enter into the
following agreement.
1. Sale of the First Shares. Subject to the terms and upon the
conditions hereof, Blue River agrees to sell, and the Purchasers agree to
purchase, on the First Closing Date (as hereinafter defined in Paragraph 3) the
First Shares.
2. Purchase Price for the First Shares. As consideration for the First
Shares, on the First Closing Date, the Purchasers shall pay to Blue River an
amount equal to One Million Five Hundred Eighteen Thousand and Seven Hundred
Fifty Dollars and Ninety-Seven Cents ($1,518,750.97).
3. First Closing. The closing (the "First Closing") of the purchase and
sale of the First Shares described herein shall be held within 5 days after all
necessary regulatory approvals for the sale of the First Shares are obtained, at
the offices of Xxxxxx & Xxxxxxxxx, or at such other time and place as is
mutually agreed to by the parties hereto (the "First Closing Date").
4. Sale of the Second Shares. Subject to the terms and conditions
hereof, Blue River agrees to sell, and the Purchasers agree to identify Second
Purchasers who will purchase, on the Second Closing Date (as hereinafter defined
in Paragraph 6) the Second Shares; provided, however, that the Purchasers agree
to purchase any Second Shares not sold to such Second Purchasers.
5. Purchase Price for the Second Shares. As consideration for the
Second Shares, on the Second Closing Date, the Second Purchasers shall pay to
Blue River an amount equal to Two Million Five Hundred Thirty-One Thousand and
Two Hundred Fifty Dollars and Four Cents ($2,531,250.04).
6. Second Closing. The closing (the "Second Closing") of the purchase
and sale of the Second Shares described herein shall be held 30 days after the
First Closing Date, or on the next succeeding business day if such date is not a
business day (the "Second Closing Date").
7. Representations and Warranties of Blue River. Blue River hereby
represents and warrants to the Purchasers and the Second Purchasers as follows:
(a) Good Title to the First Shares. The sale of the First Shares to the
Purchasers and the sale of the Second Shares to the Second Purchasers by Blue
River hereunder will vest in the Purchasers good and valid right, title and
interest in and to the First Shares, and in the Second Purchasers good and valid
right, title and interest in and to the Second Shares, in each case, free and
clear of all claims, liens, pledges, charges, security interests and
encumbrances of any nature.
(b) Organization and Capital Stock.
(1) Blue River is a corporation duly organized and validly
existing under the laws of the State of Indiana and has the corporate
power to own all of its property and assets, to incur all of its
liabilities, and to carry on its business as now being conducted. Blue
River is a savings and loan holding company registered with the Office
of Thrift Supervision (the "OTS") under the Home Owners' Loan Act of
1933, as amended ("HOLA").
(2) The authorized capital stock of Blue River consists of (i)
10,000,000 shares of Common Stock, without par value ("Blue River
Common"), of which, as of the date of this Agreement, 1,549,913 shares
are issued and outstanding, and (ii) 2,000,000 shares of preferred
stock, of which no shares are issued and outstanding. All of the issued
and outstanding shares of Blue River Common are duly and validly issued
and outstanding and are fully paid and non-assessable. As of the date
of this Agreement, Blue River had outstanding employee and director
stock options representing the right to acquire not more than 132,850
shares of Blue River Common pursuant to Blue River's stock option plans
(the "Blue River Stock Options").
(3) Except as set forth in subsection (2) above or as
otherwise provided in this Agreement, there are no shares of Blue River
Common or other capital stock or other equity securities of Blue River
outstanding and no outstanding options, warrants, rights to subscribe
for, calls, or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of
Blue River Common or other capital stock of Blue River or contacts,
commitments, understandings or arrangements under which Blue River is
or may be obligated to issue additional shares of its capital stock or
options, warrants or rights to purchase or acquire any additional
shares of its capital stock.
(c) Authorization and No Default. Blue River's Board of Directors has,
by all appropriate action, approved this Agreement and authorized the execution
of this Agreement on its behalf by its duly authorized officers and the
performance by Blue River of its obligations hereunder. Nothing in the articles
of incorporation or bylaws of Blue River, or any other agreement, instrument,
decree,
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proceeding, law, regulation, or order by or to which Blue River or any of its
subsidiaries are bound or subject would prohibit or inhibit Blue River from
consummating the transactions contemplated by this Agreement, on the terms and
conditions herein contained. This Agreement has been duly and validly executed
and delivered by Blue River and constitutes a legal, valid and binding
obligation of Blue River, enforceable against Blue River in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws affecting the
enforceability of creditors' rights generally and by judicial discretion in
applying principles of equity. No other corporate acts or proceedings are
required to be taken by Blue River to authorize the execution, delivery and
performance of this Agreement. Except for the requisite approvals of the OTS, no
notice to, filing with, or authorization by, or consent or approval of, any
federal or state bank regulatory authority is necessary for the execution and
performance of this Agreement.
(d) Subsidiaries. Each of Blue River's subsidiaries--Shelby County Bank
(the "Bank") and First Tier One Corporation ("FTOC")--is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the corporate power to own its respective properties and
assets, to incur its respective liabilities and to carry on its respective
business as now being conducted. All of the shares issued and outstanding of the
Bank are owned by Blue River and all of the issued and outstanding shares of
FTOC are owned by the Bank, in each case free and clear of all liens,
encumbrances, rights of first refusal, options or other restrictions of any
nature whatsoever. There are no options, warrants or rights outstanding to
acquire any capital stock of any of Blue River's subsidiaries and no person or
entity has any other right to purchase or acquire any unissued shares of stock
of any of Blue River's subsidiaries, nor does any such subsidiary have any
obligation of any nature with respect to its unissued shares of stock.
(e) Financial Information. The consolidated balance sheets of Blue
River and its subsidiaries as of December 31, 2001 and December 31, 2000, and
related consolidated income statements and statements of changes in
shareholders' equity and of cash flows for the three (3) years ended December
31, 2001, together with the notes thereto, included in Blue River's Form 10-KSB
for the fiscal year ended December 31, 2001, as currently on file with the
Securities and Exchange Commission (the "SEC"), and the periodic financial
statements for the fiscal quarter ended March 31, 2002, together with the notes
thereto, included in Blue River's Form 10-QSB for such quarter as currently on
file with the SEC (together, the "Blue River Financial Statements"), copies of
which have been provided to the Purchasers, have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
(except as may be disclosed therein and for the absence of footnotes and normal
year end adjustments in the quarterly Blue River Financial Statements) and
fairly present in all material respects the consolidated financial position and
the consolidated results of operations, changes in shareholders' equity and cash
flows of Blue River and its consolidated subsidiaries as of the dates and for
the periods indicated.
(f) Absence of Changes. Since March 31, 2002, there has not been any
material adverse change in the financial condition, the results of operations,
properties, prospects, assets or the business of Blue River and its subsidiaries
taken as a whole, nor have there been any events or transactions having a
material adverse effect on Blue River and its subsidiaries, taken as a whole;
provided, however, that a material adverse change shall not be deemed to include
the impact of (a) changes in banking and similar laws of general applicability
or interpretations thereof by courts or a Governmental Authority (as defined
below), (b) changes in generally accepted accounting principles or regulatory
accounting requirements applicable to banks and savings associations and their
holding companies generally, (c) the
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effects of any action taken with the prior written consent of the Purchaser
Representative, (d) any write-off or xxxx-down required of Blue River's goodwill
consistent with generally accepted accounting principles or regulatory
accounting requirements applicable to banks and savings associations and their
holding companies generally and (e) changes in the general level of interest
rates or conditions or circumstances that affect the banking industry,
generally.
(g) Regulatory Enforcement Matters. Except as described in Exhibit
7(g), neither Blue River nor any of its subsidiaries is subject to, or has
received any notice or advice that it may become subject to, any order,
agreement or memorandum of understanding with any federal or state agency
charged with the supervision or regulation of thrifts or thrift holding
companies or engaged in the insurance of thrift deposits or any other court,
administrative agency or commission or federal, state or local governmental
authority or instrumentality having supervisory or regulatory authority with
respect to Blue River or any of its subsidiaries ("Governmental Authority").
(h) Tax Matters. The reserve for taxes in the unaudited financial
statements of Blue River for the quarter ended March 31, 2002, is, in the
opinion of management, adequate to cover all of the tax liabilities of Blue
River and its subsidiaries (including, without limitation, income taxes and
franchise fees) as of such date in accordance with generally accepted accounting
principles ("GAAP").
(i) Litigation. Except as described in Exhibit 7(i), there is no
litigation, claim or other proceeding before any arbitrator or Governmental
Authority pending or, to the knowledge of Blue River, threatened, against Blue
River or any of its subsidiaries, or to which the property of Blue River or any
of its subsidiaries is or would be subject involving a monetary amount, singly
or in the aggregate, in excess of $25,000, or a request for specific
performance, injunctive relief, or other equitable relief.
(j) Reports. Except as provided in Exhibit 7(j), Blue River and each of
its subsidiaries has filed all reports and statements, together with any
amendments required to be made with respect thereto, if any, that it was
required to file with (i) the OTS, (ii) the Federal Deposit Insurance
Corporation (the "FDIC"), (iii) the SEC, (iv) any state securities authorities,
and (v) any other Governmental Authority with jurisdiction over Blue River or
any of its subsidiaries. As of their respective dates, each of such reports and
documents, including the financial statements, exhibits and schedules thereto,
complied in all material respects with the relevant statutes, rules and
regulations enforced or promulgated by the regulatory authority with which they
were filed, and did not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(k) Loans and Investments.
(1) Except as set forth in Exhibit 7(k)(1), as of March 31,
2002, the Bank and its subsidiaries have no loan in excess of $10,000
that has been classified by regulatory examiners or management of the
Bank as "Substandard," "Doubtful" or "Loss" or in excess of $10,000
that has been identified by accountants or auditors (internal or
external) as having a significant risk of uncollectability. As of the
date of this Agreement, the most recent loan watch list of the Bank and
a list of all loans in excess of $10,000 that the Bank has determined
to be ninety (90) days or more past due with respect to principal or
interest payments or has placed on nonaccrual status are set forth in
Exhibit 7(k)(2).
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(2) The reserves, the allowance for possible loan and lease
losses and the carrying value for real estate owned which are shown on
the Blue River Financial Statements as of March 31, 2002, are, in the
opinion of management of Blue River and to the best knowledge of Blue
River, as of March 31, 2002, adequate in all respects under the
requirements of generally accepted accounting principles applied on a
consistent basis to provide for possible losses on items for which
reserves were made, on loans and leases outstanding and real estate
owned as of March 31, 2002, and, as of the date of this Agreement, Blue
River has no knowledge of developments since March 31, 2002, which
would cause those amounts to be inadequate. To the best knowledge of
Blue River, the aggregate loan balances outstanding as of March 31,
2002, in excess of the reserve for loan losses as of such date, were,
as of March 31, 2002, collectible in accordance with their respective
terms.
(l) Employee Matters. Blue River and its subsidiaries are and have been
in material compliance with all applicable laws respecting employment and
employment practices, terms and conditions of employment and wages and hours,
including, without limitation, any such laws respecting employment
discrimination and occupational safety and health requirements.
(m) Title to Properties; Insurance. Blue River and its subsidiaries
have marketable title, free and clear of all liens, charges and encumbrances
(except taxes which are a lien but not yet payable and liens, charges or
encumbrances reflected in the Blue River Financial Statements and easements,
rights-of-way, and other restrictions which do not have a material adverse
effect on Blue River and its subsidiaries, taken as a whole, and further
excepting in the case of other real estate owned ("OREO"), as such real estate
is internally classified on the books of Blue River or its subsidiaries, rights
of redemption under applicable law) to all of their owned real properties. All
material insurable properties owned or held by Blue River and its subsidiaries
are adequately insured by financially sound and reputable insurers in such
amounts and against fire and other risks insured against by extended coverage
and public liability insurance, as is customary with thrift holding companies of
similar size.
(n) Environmental Matters.
(1) As used in this Agreement, "Environmental Laws" means all
local, state and federal environmental, health and safety laws and
regulations in all jurisdictions in which Blue River and its
subsidiaries have done business or owned, leased or operated property,
including, without limitation, the Federal Resource Conservation and
Recovery Act, the Federal Comprehensive Environmental Response,
Compensation and Liability Act, the Federal Clean Water Act, the
Federal Clean Air Act, and the Federal Occupational Safety and Health
Act.
(2) As used in this Agreement "Hazardous or Toxic Wastes"
means any and all hazardous, toxic, radioactive and/or other
substances, materials, whether or not naturally occurring, which are or
become regulated under any Environmental Laws, including, but not
limited to, substances, materials, or wastes listed in the United
States Department of Transportation Hazardous Materials Table (49 CFR
172.101) and/or identified by the United States Environmental
Protection Agency pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., the
Clean Water Act, 33 U.S.C. Section 1251 et seq., the Clean Air Act, 42
U.S.C. Section 7401 et seq. and/or the Superfund Amendments and
Reauthorization Act of 1986, PL 99-399 and/or any petroleum, petroleum
products, oil, fuel oil, derivatives of petroleum products, explosives,
derivatives of
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explosives, reactive materials, ignitable materials, corrosive
materials, hazardous chemicals, hazardous wastes, hazardous substances,
extremely hazardous substances, toxic substances, toxic chemicals,
radon, asbestos, methane gas, polychlorinated biphenyl, radioactive
materials, medical waste, biomedical waste, infectious materials, any
other element, compound, mixture, solution, substance, material and/or
waste which may pose a present and/or potential hazard to health,
safety, or environment.
(3) Except for the St. Xxxx, Indiana branch of the Bank as to
which no representation in this subparagraph 7(n)(3) is made, based on
the best knowledge of Blue River, neither the conduct nor operation of
Blue River or its subsidiaries nor any condition of any property
presently or previously owned, leased or operated by any of them
violates or violated Environmental Laws in any respect material to the
business of Blue River and its subsidiaries and no condition has
existed or event has occurred with respect to any of them or any such
property that, with notice or the passage of time, or both, would
constitute a violation material to the business of Blue River and its
subsidiaries of Environmental Laws or obligate (or potentially
obligate) Blue River or its subsidiaries to remedy, stabilize,
neutralize or otherwise alter the environmental condition of any such
property where the aggregate cost of such actions would be material to
Blue River and its subsidiaries. Neither Blue River nor any of its
subsidiaries has received any notice from any person or entity that
Blue River or its subsidiaries or the operation or condition of any
property ever owned, leased or operated by any of them are or were in
violation of any Environmental Laws or that any of them are responsible
(or potentially responsible) for the cleanup or other remediation of
any pollutants, contaminants, or hazardous or toxic wastes, substances
or materials at, on or beneath any such property.
(o) No Undisclosed Liabilities. Blue River and its subsidiaries do not
have any material liability, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due (and there is no past or present fact,
situation, circumstance, condition or other basis for any present or future
action, suit or proceeding, hearing, charge, complaint, claim or demand against
Blue River or its subsidiaries giving rise to any such liability) required in
accordance with GAAP to be reflected in an audited consolidated balance sheet of
Blue River or the notes thereto, except (i) for liabilities set forth or
reserved against in the Blue River Financial Statements, or (ii) for normal
fluctuations in the amount of the liabilities referred to in clause (i) above or
other liabilities occurring in the ordinary course of business of Blue River and
its subsidiaries since the date of the most recent balance sheet included in the
Blue River Financial Statements, which fluctuations in the aggregate are not
material to Blue River and its subsidiaries taken as a whole.
(p) Books and Records. The books and records of Blue River and its
subsidiaries have been fully, properly and accurately maintained in all material
respects, there are no material inaccuracies or discrepancies of any kind
contained or reflected therein, and they fairly present the financial position
of Blue River and its subsidiaries.
8. Representations and Warranties of the Purchasers. The Purchasers
hereby represent and warrant to Blue River as follows:
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(a) The Purchasers are acquiring the First Shares for
investment purposes and have no present intent to sell, distribute or
otherwise transfer the First Shares acquired pursuant to this
Agreement.
(b) The Purchasers have the full right, power and authority to
execute this Agreement and to purchase the First Shares in accordance
herewith.
(c) The Purchasers represent and warrant that they have been
advised and fully understand that the First Shares of Blue River Common
being issued and sold to them on the First Closing Date by Blue River
has not been registered under the Securities Act of 1933, as amended
("1933 Act"), by reason of an exemption under the 1933 Act which
depends upon their investment intent regarding the securities being
purchased.
(d) The Purchasers further represent and warrant that they are
aware that Blue River is relying on their representations, that they
have been advised about, are familiar with, and have had access to
information regarding the affairs of Blue River, and that they are
capable of losing their entire investment in the securities.
(e) Xxxxxxx Xxxxxxx III and Xxxxx X. Xxxxxx are residents of
Indiana.
(f) Each of the Purchasers is an accredited investor within
the meaning of Regulation D under the 1933 Act.
9. Survival of representations and warranties. The representations and
warranties set forth in Paragraphs 7 and 8 hereof shall survive for a period
which ends 18 months from the date of this Agreement and shall not be affected
by any investigation, verification, or approval by any party hereto or by anyone
on behalf of any of such parties. Blue River will indemnify, defend, and hold
Purchasers and the Second Purchasers harmless from and against any and all
claims, demands, liabilities, damages, suits, actions, judgments, fines,
penalties, loss, cost, and expenses (including, without limitation, attorney's
fees) arising or resulting from, or suffered, sustained, or incurred by
Purchasers or the Second Purchasers as a result (direct or indirect) of any
breach of any of the foregoing representations and warranties of Blue River,
which indemnity shall survive for a period of 18 months from the date of this
Agreement. The Purchasers will indemnify, defend, and hold Blue River harmless
from and against any and all claims, demands, liabilities, damages, suits,
actions, judgments, fines, penalties, loss, cost, and expenses (including,
without limitation, attorney's fees) arising or resulting from, or suffered,
sustained, or incurred by Blue River as a result (direct or indirect) of any
breach of any of the foregoing representations and warranties of the Purchasers,
which indemnity shall survive for a period of 18 months from the date of this
Agreement.
10. Actions Pending the Sale. From the date hereof until the earlier of
the termination of this Agreement or the Second Closing Date, except as
otherwise expressly required or contemplated by this Agreement, without prior
consultation with Xxxxxxx Xxxxxxx III, as representative of the Purchasers and
the Second Purchasers (the "Purchaser Representative"), Blue River will not, and
will cause each of its direct or indirect subsidiaries (collectively, the
"Subsidiaries") not to:
(a) Ordinary Course. Conduct the business of Blue River and its
subsidiaries other than in the ordinary and usual course or, to the extent
consistent therewith, fail to use reasonable efforts to
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preserve intact their business organizations and assets and maintain their
rights, franchises and existing relations with customers, suppliers, employees
and business associates.
(b) Capital Stock. Except for the valid exercise of Blue River Stock
Options, issue, sell or otherwise permit to become outstanding, or authorize the
creation of, any additional shares of Blue River Common or any rights to
subscribe for or purchase Blue River Common or any other capital stock, or
securities convertible into or exchangeable for any capital stock, of Blue River
or its subsidiaries, (2) permit any additional shares of Blue River Common or
capital stock of Blue River's subsidiaries to become subject to new grants of
employee or director stock options, restricted stock grants, or similar
stock-based employee or director rights, (3) repurchase, redeem or otherwise
acquire, directly or indirectly, any shares of Blue River Common or capital
stock of Blue River's subsidiaries except pursuant to the exercise of Blue River
Stock Options, (4) effect any recapitalization, reclassification, stock split or
like change in capitalization, or (5) enter into, or take any action to cause
any holders of Blue River Common to enter into, any agreement, understanding or
commitment relating to the right of holders of Blue River Common to vote any
shares of Blue River Common, or cooperate in any formation of any voting trust
relating to such shares.
(c) Compensation; Employment Contracts; Etc. Enter into, amend, modify,
renew or terminate any employment, consulting, severance or similar contracts
with any directors, officers or employees of, or independent contractors with
respect to, Blue River or its subsidiaries, or grant any salary, wage or other
increase or increase any employee benefit (including incentive or bonus
payments), except (1) for normal general increases in salary to individual
employees in the ordinary course of business consistent with past practice, and
(2) for other changes that are required by applicable law.
(d) Benefit Plans. Enter into, establish, adopt, amend, modify or
terminate any pension, retirement, stock option, stock purchase, savings, profit
sharing, employee stock ownership, deferred compensation, consulting, bonus,
group insurance or other employee or director benefit, incentive or welfare
contract, plan or arrangement, or any trust agreement (or similar arrangement)
related thereto, or make any new or increase any outstanding grants or awards
under any such contract, plan or arrangement, in respect of any current or
former directors, officers or employees of, or independent contractors with
respect to, Blue River or its subsidiaries (or any dependent or beneficiary of
any of the foregoing persons), including taking any action that accelerates the
vesting or exercisability of or the payment or distribution with respect to,
stock options or other compensation or benefits payable thereunder, except, in
each such case, as may be required by applicable law or to satisfy contracts
existing on the date hereof.
(e) Governing Documents. Amend the Blue River Articles of
Incorporation, Blue River By-laws or the charter, articles of incorporation, or
by-laws (or similar governing documents) of any of Blue River's subsidiaries.
11. Covenants.
(a) Directors. At the First Closing Date, Xxxxxxx Xxxxxxx III (for a
term ending in 2003) and Xxxxx X. Xxxxxx (for a term ending in 2005) shall be
added to the Board of Directors of Blue River and Xxxxxxx Xxxxxxx III shall be
added to the Board of Directors of the Bank for a term ending in 2003. In 0000,
Xxxxxxx Xxxxxxx III shall be entitled to designate another director who shall be
added to the
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Board of Directors of Blue River for a term ending in 2006. That additional
director shall be a resident of Indiana and shall be subject to the approval of
Blue River's Board of Directors, which approval shall not be unreasonably
withheld. Collectively these three directors shall be referred to herein as the
"New Directors." Blue River agrees, subject to the Board's fiduciary duty, to
cause Xxxxxxx Xxxxxxx III to be included in management's slate of directors for
an additional three-year term on the Board when his initial term expires.
Subject to the Board's fiduciary duty, Blue River agrees to cause the Bank to
include Xxxxxxx Xxxxxxx III in the Bank's slate of directors for an additional
three-year term on the Bank's Board when his initial term expires.
(b) Access; Information.
(1) Blue River agrees that upon reasonable notice and subject
to applicable laws relating to the exchange of information, it shall
afford the Purchasers and, after they sign appropriate confidentiality
agreements, the Second Purchasers, and their counsel, accountants and
other authorized representatives, such access during normal business
hours throughout the period prior to the Second Closing Date to the
books, records (including, without limitation, tax returns and work
papers of independent auditors), properties, personnel and to such
other information as the Purchasers and the Second Purchasers may
reasonably request and, during such period, Blue River shall furnish
promptly to the Purchasers and the Second Purchasers a copy of each
material report, schedule and other document filed by it pursuant to
the requirements of federal or state securities or banking laws, and
all other information concerning the business, properties and personnel
of it as the Purchasers and the Second Purchasers may reasonably
request.
(2) No investigation by the Purchasers or the Second
Purchasers of the business and affairs of Blue River shall affect or be
deemed to modify or waive any representation, warranty, covenant or
agreement in this Agreement, or the conditions to the Purchasers' or
the Second Purchasers' obligation to consummate the transactions
contemplated by this Agreement.
(c) Acquisition Proposals. Blue River agrees that until the Second
Closing Date it shall not, and shall cause its subsidiaries and its
subsidiaries' officers, directors, agents, advisors and affiliates not to,
solicit or encourage inquiries or proposals with respect to, or engage in any
negotiations concerning, or provide any confidential information to, or have any
discussions with, any person relating to, any tender or exchange offer, proposal
for a merger, consolidation or other business combination involving Blue River
or any of its subsidiaries or any proposal or offer to acquire in any manner a
substantial equity interest in, or a substantial portion of the assets or
deposits of, Blue River or any of its subsidiaries, other than the transactions
contemplated by this Agreement (any of the foregoing, an "Acquisition
Proposal"); provided, however, that if Blue River is not otherwise in violation
of this subparagraph 11(c), the Blue River Board of Directors may provide
information to, and may engage in such negotiations or discussions with a person
with respect to an Acquisition Proposal, directly or through representatives, if
the Blue River Board of Directors, after consulting with and considering the
advice of its financial advisor and its outside counsel, determines in good
faith that its failure to engage in any such negotiations or discussions would
constitute a failure to discharge properly the fiduciary duties of such
directors in accordance with Indiana law. Blue River shall promptly (within 24
hours) advise the Purchasers following the receipt by it of any Acquisition
Proposal and the substance thereof (including the identity of the person making
such Acquisition Proposal and a copy of such Acquisition
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Proposal), and advise the Purchasers of any developments with respect to such
Acquisition Proposal immediately upon the occurrence thereof.
(d) Regulatory Applications. Blue River and the Purchasers shall
cooperate and use their respective reasonable best efforts to prepare all
documentation, to effect all filings and to obtain all permits, consents,
approvals and authorizations of all third parties and any Governmental Authority
necessary to consummate the transactions contemplated by this Agreement as soon
as practicable following the date hereof. Each of Blue River and the Purchasers
agree that it will consult with the other parties hereto with respect to the
obtaining of all material permits, consents, approvals and authorizations of all
third parties and Governmental Authorities necessary or advisable to consummate
the transactions contemplated by this Agreement and each party will keep the
other party appraised of the status of material matters relating to completion
of the transactions contemplated hereby. Copies of applications and
correspondence with such Governmental Authorities promptly shall be provided to
the other parties.
(e) Indemnification/D & O Insurance. The New Directors shall be
entitled to the same indemnification protections as are available to other
directors of Blue River in Blue River's Code of By-laws and under the Indiana
Business Corporation Law (the "IBCL"). Blue River shall use commercially
reasonable efforts to maintain in effect a directors and officers liability
policy with policy limits of no less than of $1,000,000 and an umbrella policy
with policy limits of no less than $2,000,000 to provide insurance protection
for the directors of Blue River while the New Directors serve on the Board of
Directors of the Bank.
(f) Transfer Restrictions.
(1) During a one year period following the First Closing Date,
the Purchasers agree that they will not offer, sell, transfer or
otherwise dispose of any or all of the First Shares purchased herein
without a written opinion of counsel satisfactory to Blue River that
such disposition is exempt from the registration requirements of the
1933 Act or unless an effective registration statement under the 1933
Act covering these securities exists. The Purchasers understand that
the First Shares do not presently qualify for sale under Rule 144 and
that they must hold them for at least one year in order to dispose of
them under Rule 144.
(2) The Purchasers also agree that the following legend, or
one substantially similar, may be placed on the certificate for the
First Shares delivered to them and any substitute therefor:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, and have been
acquired in a transaction or chain of transactions not
involving any public offering. The disposition of these
securities is subject to restrictions under the federal
securities laws, and these securities may not be sold,
transferred, pledged, hypothecated or otherwise disposed of
without an effective registration statement for such shares
under the Securities Act of 1933 or a written opinion of
counsel satisfactory to the Company that such disposition is
exempt from the registration requirements of the Securities
Act of 1933.
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(g) Supplements to Exhibits. Blue River shall promptly supplement,
amend and update monthly and as of the First Closing Date and the Second Closing
Date, the Exhibits attached to its representations and warranties in this
Agreement with respect to any matters hereafter arising which, if in existence
or having occurred as of the date of this Agreement, would have been required to
be set forth or described in such Exhibits.
(h) St. Xxxx, Indiana Branch. Subject to the advice of its
environmental consultant and attorneys, Blue River shall cause Bank to submit a
Voluntary Remediation Work Plan (the "Work Plan") as contemplated by Indiana
Code 13-25-5, with respect to the St. Xxxx, Indiana location of the Bank which
is currently entered in Indiana's Voluntary Remediation Program (VRP # 601060).
Subject to the advice of its environmental consultant and attorneys, the Work
Plan shall address soil and groundwater contamination, irrespective of the
source of contaminants, that exist at the site including, but not limited to,
contaminants resulting from leaks of fuel oil and gasoline. Blue River
represents that as of the date of this Agreement, to the best of its knowledge
and based on current estimates of its environmental consultant and on the
assumption that the Work Plan as prepared by its environmental consultant will
be approved by the Commissioner of the Indiana Department of Environmental
Management, the cost to complete the remediation to be described in the Work
Plan will not exceed the amount currently accrued for such matters on the Blue
River Financial Statements as of March 31, 2002, plus a $16,000 estimated fee
payable to the Indiana Department of Environmental Management. Subject to the
advice of its environmental consultant and attorneys, Blue River covenants that
it will not withdraw from the voluntary remediation program or otherwise take
any action inconsistent with its continuing obligations arising under this
Agreement concerning the remediation of the Bank property located in St. Xxxx,
Indiana. Subject to the advice of its environmental consultant and attorneys,
Blue River covenants that it will diligently pursue approval of the Work Plan by
the Commissioner at the Indiana Department of Environmental Management, in an
effort to obtain such approval as soon as practicable.
(i) 1933 Act Exemption. The Purchasers, in identifying the Second
Purchasers, shall take no actions, including, without limitation, a general
solicitation within the meaning of Reg. Section 502(c) promulgated under the
1933 Act, which would cause the sale of the First Shares or the Second Shares to
lose an exemption from the registration requirements of the 1933 Act.
12. Rights Offering.
(a) Blue River intends to prepare promptly after the execution of this
Agreement a registration statement on Form S-2 or S-3 (the "Registration
Statement") to be filed by Blue River with the SEC relating to a shareholder
rights offering (the "Offering") of 555,555 shares of Blue River Common at a
price of $4.50 per share. Blue River intends that such Registration Statement
shall be filed as soon as practicable after the Second Closing Date. The
Offering will be made to Blue River's existing shareholders as of a record date
prior to the First Closing Date who will receive non-transferable subscription
rights to acquire the shares offered in the Offering. The shareholders will
receive a basic subscription right plus an oversubscription if there are shares
remaining available which would permit them to maintain a percentage interest in
Blue River which is equal to their percentage interest as of the date hereof. If
it decides to proceed with the Offering within 12 months of the date of this
Agreement, Blue River will not alter the terms of such Offering as described in
this subparagraph 12(a) without the consent of the Purchaser Representative,
which consent will not be unreasonably withheld.
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(b) The Offering will be conducted solely by Blue River and its
officers without additional compensation for such selling
efforts.
(c) Blue River agrees to use its reasonable efforts to cause the
Registration Statement to be declared effective by the SEC as
promptly as practicable after filing thereof. Blue River also
agrees to use all reasonable best efforts to obtain all
necessary state securities law or "Blue Sky" permits and
approvals required for the Offering.
13. Termination. This Agreement may be terminated as to transactions
yet to be consummated hereunder: (a) Mutual Consent. At any time prior to the
First Closing Date or the Second Closing Date, by the mutual consent of Blue
River, if the Board of Directors so determines by vote of a majority of the
members of its entire Board, and the Purchasers.
(b) Breach. At any time prior to the First Closing Date or the Second
Closing Date, by Blue River, if its Board of Directors so determines by vote of
a majority of the members of its entire Board, or the Purchasers in the event of
either: (1) a breach by the other party of any representation or warranty
contained herein, which breach cannot be or has not been cured within 30 days
after the giving of written notice to the breaching party of such breach; or (2)
a breach by the other party of any of the covenants or agreements contained
herein, which breach cannot be or has not been cured within 30 days after the
giving of written notice to the breaching party of such breach.
(c) Delay of First Closing Date. At any time prior to the First Closing
Date, by Blue River, if its Board of Directors so determines by vote of a
majority of the members of its entire Board of Directors, or by the Purchasers,
in the event that the sale of the First Shares is not consummated by December
31, 2002, except to the extent that the failure to consummate the sale of the
First Shares arises out of or results from the action or inaction of the party
seeking to terminate pursuant to this subparagraph 13(c).
(d) No Approval. By Blue River, if its Board of Directors so determines
by a vote of a majority of the members of its entire Board, or the Purchasers,
in the event the approval of any Governmental Authority required for
consummation of the transactions contemplated by this Agreement shall have been
denied by final non-appealable action of such Governmental Authority.
(e) Acceptance of Superior Proposal. By Blue River, if, without
breaching subparagraph 11(c) hereof, Blue River shall contemporaneously enter
into a definitive agreement with a third party providing for an Acquisition
Proposal; provided, that the right to terminate this Agreement under this
subparagraph 13(e) shall not be available to Blue River unless it delivers to
the Purchasers written notice of Blue River's intention to terminate at least
five days prior to termination and unless it consummates the sale of the First
Shares to the Purchasers pursuant to this Agreement prior to any consummation of
the Acquisition Proposal.
(f) Effect of Termination and Abandonment. In the event of termination
of this Agreement, no party to this Agreement shall have any liability or
further obligation to any other party hereunder except that termination will not
relieve a breaching party from liability for any breach of this Agreement giving
rise to such termination.
-12-
14. Conditions Precedent to Blue River's Obligations. All obligations
of Blue River under this Agreement are subject to the fulfillment, prior to or
on the First Closing Date or the Second Closing Date, respectively, of each of
the following conditions:
(a) The Purchasers' representations and warranties contained in
this Agreement shall be true at the time of the First Closing
as though such representations and warranties were made at
such time; and
(b) The Purchasers shall have delivered to Blue River wire
transfers in federal funds of $1,518,750.97 as the purchase
price for the First Shares as of the First Closing Date.
(c) The Second Purchasers shall have delivered to Blue River wire
transfers in federal funds $2,531,250.04 as the purchase price
of the Second Shares.
(d) All approvals and authorizations of Governmental Authorities
required for the consummation of the transactions contemplated
by this Agreement shall have been obtained or made and shall
be in full force and effect and all waiting periods required
by law shall have expired.
(e) The Second Purchasers shall have made representations in
writing like those set forth in Section 8(a) through (d) and
8(f), which representations and warranties shall be true at
the time of the Second Closing, and shall have agreed in
writing to the transfer restrictions and stock legend set
forth in Section 11(f) hereof.
15. Conditions Precedent to the Purchasers' Obligations. All
obligations of the Purchasers under this Agreement are subject to the
fulfillment, prior to or on the First Closing Date or the Second Closing Date,
respectively, of each of the following conditions:
(a) Blue Rivers' representations and warranties contained in this
Agreement shall be true at the time of the First Closing or
the Second Closing, respectively, as though such
representations and warranties were made at such time;
(b) Blue River shall have performed in all material respects all
obligations required to be performed by it under this
Agreement at or prior to the First Closing Date and at or
prior to the Second Closing Date.
(c) Blue River shall deliver to each of the Purchasers at the
First Closing certificates representing the First Shares, in
the amounts set forth on Exhibit A.
(d) Blue River shall deliver to each of the Second Purchasers at
the Second Closing certificates representing the Second Shares
that they are to acquire at the Second Closing.
(e) All approvals and authorizations of Governmental Authorities
required for the consummation of the transactions contemplated
by this Agreement shall have been obtained or made and shall
be in full force and effect and all waiting periods required
by law shall have expired.
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16. Entire Agreement. This Agreement, including any document delivered
by the Purchasers, the Second Purchasers, or Blue River in accordance herewith,
constitutes the entire agreement and supersedes all prior agreements and
understandings, oral and written, between the parties hereto with respect to the
subject hereof.
17. Benefits. This Agreement will inure to the benefit of the parties
hereto and shall be binding upon them and their respective successors and
assigns.
18. Governing Law. The parties hereto agree that this Agreement shall
be construed as to both the validity and performance and shall be enforced in
accordance with and governed by the laws of the State of Indiana, except to the
extent that federal law applies.
19. Notices. Any consent, notice or demand under this Agreement shall
be in writing and shall be deemed given when delivered personally or mailed by
registered mail. Such notice shall be addressed as follows:
To the Purchasers or the Second Purchasers: Xxxxxxx Xxxxxxx III
00 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000X
Xxxxxxxxxxxx, Xxxxxxx 00000
To Blue River: Blue River Bancshares, Inc.
00 X. Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxx, Chairman
20. Third Party Beneficiaries. Except for the Second Purchasers who
shall have the right to enforce the provisions in this Agreement relating to the
Second Purchasers, nothing in this Agreement, express or implied, is intended to
confer upon any person, other than the parties hereto or their respective
successors and permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
21. Expenses. Each party hereto will bear all expenses incurred by it
in connection with this Agreement and the transactions contemplated hereby;
provided, however, that Blue River shall pay legal and accounting expenses and
OTS filing fees of up to $50,000 on behalf of the Purchasers.
IN WITNESS WHEREOF, this Agreement was executed by Blue River and the
Purchasers as of the date first written above.
BLUE RIVER BANCSHARES, INC.
By: /s/ Xxxxxx X. Xxxx
------------------------
Xxxxxx X. Xxxx
Title: Chairman
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/s/ Xxxxxxx Xxxxxxx, III
------------------------
Xxxxxxx Xxxxxxx, III
/s/ Xxxxx X. Xxxxxx
------------------------
Xxxxx X. Xxxxxx
/s/ L. Xxxx Xxxxxx
------------------------
L. Xxxx Xxxxxx
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EXHIBIT A
No. of First Shares
-------------------
Xxxxxxx Xxxxxxx III
(through his XXX) 256,871
Xxxxx X. Xxxxxx
(through his XXX) 42,812
L. Xxxx Xxxxxx 21,406
-------
TOTAL 321,089
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